National Defence Committee on May 6th, 2026

[The Chair, Liberal, Charles Sousa]

I call this meeting to order.

Welcome to meeting number 36 of the House of Commons Standing Committee on National Defence. Pursuant to Standing Order 108(2) and the motion adopted by the committee on Monday, February 23, 2026, the committee is meeting to study the impact of the defence industrial strategy.

Today's meeting is taking place in a hybrid format. Before we continue, I ask participants to consult the guidelines on the table. These measures are to help prevent audio feedback and protect the health and safety of our interpreters.

As a reminder for witnesses and members, please wait until I recognize you by name before speaking. For interpretation, please use the earpiece and select the appropriate channel. Again, all comments should be addressed through the chair.

I'd now like to welcome the minister and our witnesses.

Of course, we have with us the Honourable David J. McGuinty, Minister of National Defence, with Lieutenant-General Stephen Kelsey, vice-chief of the defence staff, Canadian Armed Forces; Lieutenant-General Erick Simoneau, chief of military personnel and commander of military personnel command; Wendy Hadwen, assistant deputy minister, policy and industry; and Heather Sheehy, assistant deputy minister, materiel.

Minister, it's over to you. You have five minutes. Does that sound good?

[David McGuinty, Liberal, Minister of National Defence]

It does, Mr. Chair. Thank you very much. It's great to be back.

Good afternoon, everyone. I'm sorry we're late getting started, but here we are.

Mr. Chair, I would like to start by thanking the committee for inviting me to discuss Canada's first defence industrial strategy. I think it's my fifth appearance in 10 months.

I also want to welcome the newest members to this committee. We appreciate the work you do in supporting Canada's defence and security.

Before proceeding any further, Mr. Chair, I want to recognize the members of the Canadian Armed Forces and the Canadian Coast Guard. The women and men of both organizations, now under the rubric of defence, serve with professionalism, dedication and courage. They put service before self to defend our country.

Everything the government is doing—everything, including Canada's defence industrial strategy—is to ensure they have the tools, the equipment and the support they need to do the difficult jobs we ask of them. That's why we're rebuilding, we're rearming and we're reinvesting in the Canadian Armed Forces, and we're doing so in a way that strengthens Canada's broader economy.

As the Prime Minister recently announced, Canada has reached the defence spending target of 2% of gross domestic product, or GDP, five years ahead of schedule. We are working diligently to meet the North Atlantic Treaty Organization's, or NATO, new commitment to defence investment—5% of GDP by 2035. That is why we have held important discussions with industry, the provinces and territories, academia, innovators from all walks of life, indigenous communities, the banking sector, the financial sector, as well as our trusted allies and partners. These consultations have provided a clear picture of what stakeholders expect from a modern defence industrial strategy. They told us we need to move faster, ensure greater predictability and strengthen Canada's defence industrial base.

We also agreed that Canadian companies must remain competitive, resilient and sovereign. Most importantly, we must be able to deliver the capabilities our armed forces need when they need them.

The defence industrial strategy is our response. This strategy prioritizes Canadian suppliers and materials through a “build-partner-buy” framework—and in that order, Mr. Chair. It means building defence equipment in Canada as a matter of priority, partnering with our allies where it adds value and buying from suppliers abroad only when necessary, with rigorous conditions that spur reinvestment here at home.

The strategy is designed around five key pillars. The first is strengthening Canada's sovereign capabilities by ensuring that we can develop and sustain critical technologies here at home and reducing our reliance on foreign suppliers. The second is modernizing procurement to deliver equipment faster through more efficient processes and more resilient supply chains. The third is investing in innovation, particularly in dual-use technologies such as artificial intelligence, quantum and advanced communications tech. The fourth is growing Canada's defence industrial base, supporting small and medium-sized enterprises and expanding opportunities right across the country. The fifth is deepening partnerships with trusted NATO allies to enhance interoperability and open new markets for Canadian firms.

Over the next 10 years, we aim to do the following: create 125,000 new jobs across Canada, increase defence exports by 50%, increase the share of defence contracts awarded to Canadian firms to 70%, boost revenues for small and medium-sized businesses by more than $5 billion each year, and increase investment in defence research and development by 85%.

In budget 2025, we announced $6.6 billion to invest in our defence industry over five years under the defence industrial strategy. By 2035, we expect the DIS to deliver a total of $180 billion in major defence equipment, $290 billion in defence-related capital investment and $125 billion in downstream economic activity. All together, this represents more than half a trillion dollars in total economic impact across Canada.

We're already seeing progress. Just last month, we announced a $900-million investment in the National Research Council to support the defence industrial strategy. That includes $500 million for next-generation aerospace technologies and $105 million for a new drone innovation hub in Ottawa and Mirabel. These investments will accelerate innovation, strengthen our industrial base and deliver new capabilities for the CAF.

The defence industrial strategy is a unifying, unified national effort. At its core, it's about strengthening our sovereignty and building a more resilient, innovative and secure economy for Canadians. Above all, it's about delivering for the members of the CAF and the Coast Guard, who serve our country every day. We owe it to them to get this right. That is precisely what we are working to do.

I look forward to responding to questions from members.

Thank you so much.

[The Chair, Liberal, Charles Sousa]

Thank you, Minister. I appreciate your opening remarks.

We're going to go to our first round of questions.

Mr. Bezan, our vice-chair, will start with six minutes.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Thank you, Mr. Chair.

I want to thank the minister and the department officials who are here.

Again, I also would like to extend my thanks to the brave women and men serving in the Canadian Armed Forces and the Canadian Coast Guard for protecting us here at home and carrying out some dangerous missions around the world when called upon. We want to support you in every way that you're doing that job.

Minister, your defence industrial strategy is the fifth document from this government on different defence-related activities. We're quite skeptical on whether or not you're going to be able to meet the targets that you've put in there.

When you look at the current state of the Canadian Armed Forces on fleet availability, you see that you cross the line. Less than 60% of the maritime fleets are serviceable and able to be deployed or standing in the ready for new personnel to train on. We see that land vehicles stand at only 51%. Only half are actually serviceable and usable. We're hearing stories of people in Latvia who can't even get vehicles to get training on and be certified alongside our NATO allies. It's embarrassing. The aerospace fleets that we have are even worse at 42.3%. This is all coming out of the 2024-25 departmental results report.

Ten years of Liberal government—your predecessors—have allowed the replacement and maintenance of the key fleets for our armed forces to wither away.

One that continues to be a political football for your government is the F-35. You had the Canadian Armed Forces do a review. The Department of National Defence did a review. The Department of Industry did a review. We thought we were going to finally get a decision on the F-35, which won the competition fair and square against the Gripen. Now, due to concern about what's happening in the States, we're not going to make an announcement on whether or not we're going to proceed with the F-35.

Can you update us on where we're at?

[David McGuinty, Liberal, Ottawa South, ON]

If I could, Mr. Chair, through you, I just want to make sure, Mr. Bezan, that you want to talk about the F-35. There are about five questions in there.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

No, there was one question. The rest was a statement.

[David McGuinty, Liberal, Ottawa South, ON]

The rest was a statement—good for you.

Listen. Replacing the CF-18 is going to be the most significant investment the Royal Canadian Air Force has undertaken since World War II. You're right that we announced, in 2023, that we would acquire 88 F-35s. As directed by the PM in March 2025, we are reviewing this decision, and that review does continue. We want to make sure that it is the best choice for the country.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Shouldn't you know that by now?

[David McGuinty, Liberal, Ottawa South, ON]

We're going to take the time we need to get this decision right. However, in the interim, plans are progressing for the receipt and introduction into service of the F-35, and we remain on track for scheduled aircraft deliveries by the end of this year.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

How many are on order right now?

[David McGuinty, Liberal, Ottawa South, ON]

There are 16.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

I know there are more than that. I thought that there was a payment made on the next tranche of F-35s as well.

[David McGuinty, Liberal, Ottawa South, ON]

There's not a formal commitment beyond the 16 number.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

As long as you're continuing to waffle on the F-35, you are also not making decisions about buying the next generation of fighter trainers. Already the Hawks have been retired, and even though they still had hours left on them, they're sitting in Borden, getting dismantled and used for training our aircraft mechanics and technicians.

We now have to outsource our pilot training: That is now all happening in Italy and the United States. Again, it's an embarrassment for Canada, with our World War II training of our allies and NATO aircraft training, which we did for the last two or three decades, that it has all disappeared because we don't have the equipment anymore.

[David McGuinty, Liberal, Ottawa South, ON]

We can backcast as far as you'd like, Mr. Bezan. I think we're all responsible for neglecting the investments over the last 50 years.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

We were upgrading the CF-18s and started down the path to replace them with F-35s. It goes right back to the Chrétien government, which actually bought into—

[David McGuinty, Liberal, Ottawa South, ON]

When Mr. Harper left government—

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

You guys said you wouldn't buy the F-35s.

[David McGuinty, Liberal, Ottawa South, ON]

—GDP funding for defence was below 1%. Now we're at 2%, and we're climbing to 3.5% and 5% by 2035.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

It's 0.54%, and it's based upon shell games.

[David McGuinty, Liberal, Ottawa South, ON]

In fact, by 2035—we're talking about from now until then—there will be almost a half a trillion dollars of investment in defence. We've set a plan here. It's a very hard, well-costed, detailed rollout, and it will embrace the acquisition of training aircraft and beyond.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Minister, I have couple of questions for you, based upon what you mentioned earlier. You said that we're going to be building drones, with some of that happening in Ottawa and some happening over in Mirabel. Who in Mirabel is doing the drones? Does it go back to DRDC, or is it to...?

[David McGuinty, Liberal, Ottawa South, ON]

Right now, the investment is in research. That research may embrace co-operation with other private sector actors, with other countries—in particular with Ukraine, which is something under consideration. This is about upping our research capabilities in drone and counterdrone capabilities.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

One complaint we've always heard is that SMEs, small entrepreneurs, the ones that are out there with innovations, can't get through the front door, and that the government continues to use primes like Boeing, like Bombardier, like Lockheed Martin, to do the various contracting. How do we go at speed to adapt new innovation from Canadian start-ups that can't walk through the door now to sell what they're building, including all sorts of drones?

[David McGuinty, Liberal, Ottawa South, ON]

To be honest, I would need half an hour to answer that comprehensively, but we don't have that kind of time.